How much in assets to yield $15,000/month in investment returns?

[Anonymous]

I need someone good with finances to do a quick calculation for me.

I am in discussion with my clueless and strategically uninvolved sister regarding our mother’s care. Our mother needs to go into an assisted living facility, and my sister is in total denial and is balking at the whole process. She said I need to just put all of our mother’s assets into some kind of investment or annuity or something so that my mother could get $15,000-$20,000 a month as a return. Then we could keep her in her home with round-the-clock care.

Because my sister is totally clueless, by her own choice, she has a very fictional idea of what our mother’s assets are. So that got me wondering how much my mother would need to have an order to convert it all into a $15,000 a month investment return (assuming run-of-the-mill investments and nothing crazy-risky). Is there anyone here who could do a back of the envelope estimate for me? I want to see just out of touch with reality my sister is.

[Anonymous]

4.5 million based on a withdrawal ate of 4.0. That assumes the 4.5 is never touched. Some people are saying that 4.0 is too high these days but I imagine it's not a worry here.

[Anonymous]

How old is your mom? Does she have Social security? The 4% withdrawal rate is for folks who need their money to last forever or 30+ years. If your mom is going into AL, she probably will be around fewer than 10 years so you could use a 10% withdrawal rate without any social security or growth. So she just needs 1.8 million or less if she has social security and will live another 10 years.

[Anonymous]

We have a 14M stock portfolio. Dividends are about 80K a year, so 6.6K a month. Why? We chose high tech stocks that give very little dividends but high potential for growth. The goal is to leave capital untouched for future generations.

You can earn more with stocks that prioritize dividends.

[Anonymous]

Anonymous wrote:We have a 14M stock portfolio. Dividends are about 80K a year, so 6.6K a month. Why? We chose high tech stocks that give very little dividends but high potential for growth. The goal is to leave capital untouched for future generations.

You can earn more with stocks that prioritize dividends.

That obviously isn’t OPs goal. His goal is to care for his mother not preserve generational assets- unless I read it wrong?

[Anonymous]

A single premium immediate annuity is good for this. Depending on how old she is you might be able to do this for under $200k.

[Anonymous]

A little under $5 million for $20,000/mo.

[Anonymous]

Anonymous wrote:A single premium immediate annuity is good for this. Depending on how old she is you might be able to do this for under $200k.

LOL She'd have to be really old. I just ran an annuity calculator with a goal of $15k per month for 10 years and it would require an investment of $1.6M

OP - you can run this on Bankrate https://www.bankrate.com/investing/annuity-calculator/

[Anonymous]

Anonymous wrote:

Anonymous wrote:A single premium immediate annuity is good for this. Depending on how old she is you might be able to do this for under $200k.

LOL She'd have to be really old. I just ran an annuity calculator with a goal of $15k per month for 10 years and it would require an investment of $1.6M

OP - you can run this on Bankrate https://www.bankrate.com/investing/annuity-calculator/

Probably confused monthly and annual income there but an annuity will be the cheapest way to do this— no need for the 10 yr guarantee that will just make it expensive

[Anonymous]

Thanks, PPs. Mom is in her mid-60s and is mostly in good physical health. People in her family generally live into their 90s. She has nowhere remotely close to $4 million in assets and she gets a modest amount of SS.

[Anonymous]

Anonymous wrote:Thanks, PPs. Mom is in her mid-60s and is mostly in good physical health. People in her family generally live into their 90s. She has nowhere remotely close to $4 million in assets and she gets a modest amount of SS.

If she is in her mid-60s and good health, why does she need assisted living already? Mid-60s to 90s is a long time to live off her assets, whatever they are.

[Anonymous]

OP,

I'm sorry you have a sibling like that. If it was that easy to earn $15K, everyone would be doing it.

I am not sure why your mom needs AL at 60 unless she has dementia or something.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thanks, PPs. Mom is in her mid-60s and is mostly in good physical health. People in her family generally live into their 90s. She has nowhere remotely close to $4 million in assets and she gets a modest amount of SS.

If she is in her mid-60s and good health, why does she need assisted living already? Mid-60s to 90s is a long time to live off her assets, whatever they are.

Same question here. OP, can you explain why your mom needs assisted living at this age?

I have a lot of friends in their sixties and even seventies who are living very active lives, no need whatsoever for assisted living at these ages for people in good health.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Thanks, PPs. Mom is in her mid-60s and is mostly in good physical health. People in her family generally live into their 90s. She has nowhere remotely close to $4 million in assets and she gets a modest amount of SS.

If she is in her mid-60s and good health, why does she need assisted living already? Mid-60s to 90s is a long time to live off her assets, whatever they are.

Same question here. OP, can you explain why your mom needs assisted living at this age?

I have a lot of friends in their sixties and even seventies who are living very active lives, no need whatsoever for assisted living at these ages for people in good health.

+1 My parents were not super active but totally fine in their own home until their 80s (had downsized to a retirement-friendly home near my sister in their mid 60s)

[Anonymous]

VTI has a 1.4% yearly dividend yield, so $13million in VTI would generate exactly $15k/month in dividends (before taxes, of course). These are pretty basic concepts on investing and income generation, OP.